Superannuation Fees Face-Off: Vanguard vs AustralianSuper vs Hostplus

Fees are one of the most important factors in your retirement savings journey. Even small differences can compound over decades and shave thousands of dollars off your final balance. In this article, we compare all fees charged by the default balanced options of three of Australia’s largest super funds: Vanguard Super, AustralianSuper and Hostplus. We break down administration, investment and transaction fees on a hypothetical $50,000 balance, explain how they work, and demonstrate their long term impact. Use this guide to make a more informed decision about which fund best suits your goals and risk profile.

Superannuation fees reduce the net returns you earn on your investments. Administration fees cover the cost of running your account and member services. Investment fees pay for the fund’s investment managers and underlying assets. Transaction costs cover buying, selling and managing the portfolio. Over a long time horizon, these components compound negatively against your balance. A fund charging 0.5% per annum instead of 1.0% can mean tens of thousands of dollars difference over a 30-year career. Understanding each fee type helps you assess value for money and choose a fund that aligns with your investment strategy and cost sensitivities.

Vanguard Super offers a low-cost, index-tracking approach. Administration fees are 0.33% per annum up to a $300,000 balance, then 0.28% on any excess. Its investment fees are embedded within the total ongoing charge figure, which currently sits at approximately 0.23% per annum for the default Vanguard Balanced Index option. There are no explicit transaction costs passed on to members. The absence of performance fees and minimal active management make Vanguard Super the cheapest of the three. Its fee structure rewards larger balances by lowering administration costs beyond the cap, making it especially attractive for long-term, buy-and-hold investors.

AustralianSuper is Australia’s largest profit-for-member fund and combines active and passive management in its default MySuper Balanced option. Administration fees are 0.10% of your balance each year, with a cap that limits the maximum payable to $350 for larger balances. Investment fees run at around 0.73% per annum and cover active management, research, and asset allocation changes. Transaction costs are included implicitly in its investment fee structure, meaning you won’t see a separate line item. AustralianSuper’s scale delivers cost efficiencies, but its active tilt pushes total fees into a mid-range position compared to purely index-based funds.

Hostplus has won awards for value but leans toward active management to generate returns. Its administration fee comprises a fixed $1.50 per week plus a reserve deduction of $37.26 annually, equating to roughly 0.23% on a $50,000 balance. Investment fees are 0.96% per annum, reflecting the cost of its active strategies, manager fees and underlying fund structures. On top of that, it explicitly charges transaction costs of approximately 0.06% per annum. While still competitive among industry peers, Hostplus ends up the most expensive of the three when all components are added together.

Administration fees differ in structure: Vanguard’s tiered percentage model rewards growing balances, AustralianSuper’s flat percentage is predictable with a generous cap, and Hostplus combines a small weekly charge with a reserve deduction. On a $50,000 account, Vanguard’s annual administration cost is $165, AustralianSuper’s is $50, and Hostplus’s is $115.26. If your balance increases, Vanguard’s costs taper off above $300,000 and AustralianSuper’s cap limits your maximum to $350 per year. Hostplus remains constant regardless of balance size, which can disadvantage larger balances over time.

Investment fees are the largest component for most members. Vanguard’s passive indexed approach comes at 0.23% per annum. AustralianSuper’s blended active/passive portfolio charges 0.73% per annum. Hostplus’s active suite costs 0.96% per annum. These fees pay for asset selection, fund manager expertise and research. Passive funds like Vanguard incur minimal trading and research costs, translating into significantly lower charges. Active funds hope to beat benchmarks but must overcome higher fees, meaning you need strong net performance to justify the additional cost.

Transaction costs reflect the cost of buying, selling and rebalancing fund assets. Vanguard Super does not separately charge members for transaction costs; these are absorbed within its overall ongoing charge. AustralianSuper similarly bundles transaction costs within its investment fee. Hostplus discloses a 0.06% transaction cost on a $50,000 balance, equating to $30 per year. While relatively small compared to other fees, transaction costs can rise in volatile markets when trading activity increases, so bundled fee models can offer more predictability.

Over a 30-year investment horizon, even a 0.5% annual fee differential compounds significantly. On a growing balance, a 1.25% total fee (Hostplus) versus 0.56% (Vanguard) can result in tens of thousands of dollars less at retirement. Lower fees also reduce the hurdle active managers must clear to deliver value. When fees alone consume a high proportion of net returns, it becomes more challenging to outperform index benchmarks. Always model projected balances under different fee scenarios to visualise the potential drag and decide whether active strategies justify their extra cost.

Choosing between Vanguard Super, AustralianSuper and Hostplus comes down to balancing cost, investment style and service. If minimizing fees is your priority and you are comfortable with passive index strategies, Vanguard Super offers the lowest cost structure. If you want a mix of active and passive management with strong member services and scale benefits, AustralianSuper sits in the middle. If you believe active managers can add alpha that outweighs higher fees, Hostplus might be appealing. Align your personal risk tolerance, return expectations and fee sensitivity when making a final decision.